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Alcohol marketing in non-western countries

: Thailand

Thaksaphon ThamarangsiInternational Health Policy Program

thaksaphon@ihpp.thaigov.net

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Outline of presentation

• Thailand: situation in brief• Thai marketing regulation• Marketing practice: Product, Price,

Place, Promotion • Synthesis part

– Difference between domestic and international operators

– Difference between advertising in Thailand and Western countries

– The way forward

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Thailand: a perfect emerging market for alcohol industry

• 65 million population, 95% Buddhism & 4% Moslem• Country in transition: modernization, increase income, fade of

religion faith and social control, globalization

• Sky rocket increase in per capita consumption (recorded alcohol) 0.26 in 1961 >> 8.47 L of pure alcohol per adult in 2001, since then quite stable

• Particular growth in western-style beverages • 12-time growth in beer consumption in 16 years, 1987-2003• Gradual decrease for domestic distilled beverages (Thai style/

indigenous style), since the liberalized market campaign, in 2000

• Unrecorded alcohol still has substantial proportion, estimated to be 2 L/capita/year

• Stable in drinker prevalence, 1/3 of adult• High gender discrepancy, female drinker prevalence~10% • Increase prevalence among teen and young adult, particularly

female• Steady increase in drinking frequency, still yet 50% drink not

more than once a month

High per capita consumption from low drinker prevalence and low drinking frequency, therefore very high drinking volume per

occasion

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Thai alcohol market: at a glimpse

14%

11%7%

68% White spirits

Other domestic spirits

Imported spirits

Beer

Share of production and imported volume by beverage type, 2005

• End of production monopoly in 90s•Affected by economic agreements (cheaper imported beverages), modern trade system• International operators has invaded Thai market since, and focused not only premium market sectors (like before)•Yet still oligopoly

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Marketing regulations • Promotion regulation revised in 2003,

known as ‘Partial Ban’, enforced between 2003-2008

• The new Alcohol Consumption Control Act 2008, – Raises minimum purchasing age (on- and off-

premises) from 18 to 20 years– Bans sale and drink in many public venues:

religion, education, park, etc– Revise advertising again, subject for further

regulation (expected to be announced soon): No advertising, except to promote social value which brand and logo can be broadcasted- but not product or quality of beverage

Confusing stage for both regulator and operatorsOperators enjoy free-riding at the moment

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Advertising control: in summaryAlcohol advertisement is regulated in three dimensions;

content, channel & time and place, and warning messages.

Prohibited contents include; • Drinking pictures and sounds and consumption

encouraging• Linking to corporate image in unclear manner• Give away or lucky draw campaign• Linking to sexual and life success and health benefits• Using celebrities ( sport/music/movie stars) as

presenter(s)

Channels• TV and radio: allow only 22.00-05.00 • Billboard: 500 meters to educational venue

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Advertisement budget categorized by types of alcohol beverages, Thailand

Source: Foundation for consumers

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BeerWhisky

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Marketing practice: Product

• Diversification of beverages: i.e. three segments of beers

• New beverage for new customer segment • Introduction of never-seen-before beverages,

tailored to customer groups: RTDs, Alcoholic Frappe

• Westernization of alcohol market• Anglicized domestic products: i.e Spy, Blue,

Golden Knight, Cavalier Trooper• Localization of low-end products: ESAN (North-

Eastern) Beer, TAI Beer • Observation: Naming beers names that are

linkable to met-amphetamine/ ‘Kick effect’: i.e. Red horse, Archa (literally horse)

• Adaptation to Thai context: Alcoholic Frappe, Beer girl

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Marketing practice: Product

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Marketing practice: Price • Mushrooming of cheap/ economy grade beverages• Disproportion to income growth• A can of beer [1.28 standard drink] is sold at 10-20

Baht (0.25-0.5 USD)• A 660 ml. bottle of 6% beer [3.18 standard drink] at 30

Baht (0.75 USD)• Beer price still higher than cola (from very cheap cola

price), generally cheaper than milk and mineral water

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Mekhong Singha Adjusted-Mekhong Adjusted-Singha

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Marketing Practice: Place• High accessibility: 110 population/1 outlet, 7.5

minute on average – licensing procedure and fee are no barrier – Modern trade: introduction of convenient

stores to every community – Substantial proportion of unlicensed outlets – Better transportation

• Effective distribution system• Point of sales: 58.64% grocery store, 17.18

convenient store, 5.3% supermarket and discount store, 0.85 from shop in petrol station: therefore 81.96 % off-premise sale

• Contract between producer and outlet

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Marketing practice: Place

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Marketing practice: Promotion• Integrated advertising• Relationships between over and below

the line promotion i.e. budgets for mobile advertisements such as ads-on-vehicle, and on-drinking-site promotions increased by 583% and 148% in one year after the 2003 Partial ban

• Modern advertising channels• Sponsorship still play a big role

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Integrated marketing

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Integrated advertisingFrom TV to Website to drinking venue

TV spot

Website

On site promotion

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Exempted area: internet

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Logo advertising

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Sponsorship & social donation• Mainly unregulated• Well designed for customer groups• Broadcasting of sponsorship by

surrogate products• Advertise on social donation • Many events are gradually replaced by

ThaiHealth Promotion Foundation, funded by 2% extra surcharge of alcohol & tobacco excise tax

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Sponsorship: sport

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Sponsorship: entertainment event

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Sponsorship: cultural events & donation

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Alcohol industry: Cunning entrepreneurs

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Give away & Lucky draw campaign

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Beer Girl system

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Advertising monitoring system• Setting up the hotline center in Health

Ministry, yet still reactive to complaints • Practically no punishment• More effective through academics:

Media Monitor project• NGOs & civil society can effectively

support regulation enforcement

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Pitfalls of current advertising control

Policy content• Comprehensiveness: unable to cover

below-the-line and modern advertising channels

• Poor punishment

Policy downstream• Poor implementation • No official and evaluation mechanism

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Differences in promotion practices: domestic and international operators • Advertising contents and channels:

decreasing discrepancy, learning from each others

• International operators: relation to its main company

• International operators: use of regional and international advertising themes

• Domestic operators: can use the locality themes

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International themes

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Differences in alcohol promotion Thailand and Western countries

• Differences mainly come from promotion regulations and cultures

• Difference in content: extent, not direction

• Sensitive issues include sexual appeal, and family drinking

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Generalization of Thai experiences to others

• Emerging market countries will suffer most from alcohol advertising in the long run. These is are the most populous areas.

• Thai marketing control is strong and comprehensive, compared to other middle and low income countries, yet it cannot stop the recruitment of new drinkers

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The way forward

• Alcohol is a globalized problem, but policy is confined to national boundary. We need international mechanism to control alcohol marketing.

• The concept of ‘Alcohol as no ordinary commodity’ should be the backbone principle for any policy decision. To have this the connection between knowledge segment, advocacy and policy makers should be strengthened.

• Knowledge generation, sharing and utilization are as of paramount important

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Scenarios analysis Country weak

Country strong

Regional/Global weak

- Pandemic alcohol consumption & harms, - Good for industries, - Bad for health

- Successful domestic alcohol policies, - threats by trade treaties

Regional/Global strong

-Alcohol policies were shelved, -NATO scenarios

- Comprehensive global, regional and national synergistic policies strategies, - Actions in good pace, - Good for health, - Fair for the industries

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Thank you